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Competitor analysis in Airline industry

Indigo
Indigo--or "individuals on the go" was established in 2005 and started
operations in August 2006 was the market leader by 2012. ith the in!eption o"
Indigo# "or the $rst time individual travelers had the ability to reserve and
pur!hase a single seat on a traditional !orporate or business %et whi!h then &ew
a "s!heduled" &ight like a traditional airline. 'rior to Indigo the only business %et
servi!es available to !onsumers !onsisted o" %et ownership or !harter# both
e(pensive options to regular airline travel. Indigo is regarded as the originator o"
two new !ategories o" !orporate %et air travel servi!e) per seat# high "re*uen!y
and the publi! or !ommer!ial !orporate %et. Indigo Airlines !ommen!ed
operations on + August 2006 with a servi!e "rom ,elhi to Imphal via -uwahati.
.he airline is owned by Inter-lobe /nterprises. It took delivery o" its $rst Airbus
A020 air!ra"t on 21 2uly 2006 and re!eived si( air!ra"t during 2006. 3ine more
air!ra"t were delivered in 2004 taking the total to 15. .he !arrier has set a target
o" serving appro(imately 00 Indian !ities by 2010 with a &eet si5e o" +0 A020 and
A021 air!ra"t. .he airline will re!eive all 100 A020 "amily air!ra"t by 2016. 6ormer
78 Airways /(e!utive 9i!e-'resident# :arketing and 'lanning ;ru!e Ashby has
%oined Indigo Airlines as their <hie" /(e!utive =>!er. .he Indian -overnment has
approved the airlines? air!ra"t import plan "in prin!iple". .he airline has also
a!*uired 0 parking spots in 3ew ,elhi and :umbai airports.
Indigo operates in 00 destinations in India and abroad with 040 &ights ea!h day.
7nlike most airlines Indigo uses hub and spoke model whereby &ights to di@erent
destinations are routed through its hub.
Indigo 8=.
8trengths
Indi-o is the only pro$table airlines running in India in low !ost !arriers
segment
It is ba!ked by young and talented management team A
It is one o" the very "ew airlines that in!orporates the best te!hnology#
human resour!e and servi!e at an a@ordable !ost to the !ustomer
Indi-oBs growth is ahead o" aviationBs overall industry growth in India
Indi-o !overs 02 destinations !overing all ma%or !ities in India
Indi-o is the se!ond largest airline in India in terms o" market share
.he !ompany had a pro$t o" Cs.650 !r in the 6D 2010.
eakness
It doesnBt have its presen!e in international market
Indi-o has to "o!us more on branding
<on!entrates only on middle !lass so!iety
<ustomers are not happy with in&ight !atering servi!es
It has to "o!us on proper baggage handling and improve the seating
!om"ort level
=pportunities
Indi-o has attra!ted many loyal !ustomer o" other airlines and !onverted
into Indi-o &yers in a very short span o" time
<ompetitors in the aviation market are not running good show and hen!e
it is time "or Indigo to grab the opportunity to go ahead
It has good opportunity to go abroad markets
Indi-o has shown tremendous growth both terms o" market share and
pro$ts in the re!ent years
It witnessed a rapid e(pansion by buying new A0208 airbus
/(panding e!onomy !lass &iers
.hreats
Cising "uel !osts has in!reased operational !ost o" EE< airlines
.he !ompanies are !utting their air travel due to the e!onomi! !risis
It "a!es !ompetition "rom other EE< airline like 8pi!e2et# -oAir
In!reasing airport "ees# de!lining rupee value# high ta(es add woes to the
industry
Air India
Air India is the &ag !arrier airline o" India owned by Air India Eimited FAIEG# a
-overnment o" India enterprise. It is the third largest airline in India Fa"ter Indi-o
and 2et AirwaysG in domesti! market share# and operates a &eet o" Airbus and
;oeing air!ra"t serving various domesti! and international airports. It is
head*uartered at the Indian Airlines House in 3ew ,elhi.I0J Air India has two
ma%or domesti! hubs at Indira -andhi International Airport and <hhatrapati
8hiva%i International Airport# and se!ondary hubs at <hennai International Airport
and 3eta%i 8ubhas <handra ;ose International Airport# Kolkata.
Air India was on!e the largest operator in the Indian sub!ontinent with a market
share o" over 60L.I4J Indi@erent $nan!ial per"orman!e and servi!e# labor trouble
pushed it to "ourth pla!e in India# behind low !ost !arriers like Indi-o# 8pi!e2et#
and its "ull servi!e rival 2et Airways. ;etween 8eptember 2004 and :ay 2011# Air
India?s domesti! market share de!lined "rom 1M.2L to 1+L# primarily be!ause o"
sti@ !ompetition "rom private Indian !arriers.I1JIMJ However# a"ter $nan!ial
restru!turing and en"or!ement o" stri!t rules and regulations# the airlines showed
signs o" turning around. In :ar!h 2010# the airlines posted its $rst positive
/;I.,A a"ter almost 6 years.I10J .he airlines bolstered its $nan!ial and physi!al
per"orman!e with a ++ per !ent slash in its operating losses in 2010-1+ and an
almost 20 per !ent growth in its operating revenue sin!e the previous $nan!ial
year.I11J As o" 2anuary 201+# Air India is the third largest !arrier in India# a"ter
Indi-o and 2et Airways with a market share o" %ust above 1ML.
8=. Analysis
8trengths o" AIC I3,IA
Air India has been the largest air !arrier in India in terms o" tra>! volume
and !ompany assets.
It owns the most updated &eet and !ompetent repairs and maintenan!e
e(pertise.
Its in"ormation systems are advan!ed and !ompatible with its operation
and servi!e.
It has a good reputation in both international and domesti! markets#
*uality servi!e and the age-old -oodwill that has still kept it alive in the
interests o" the res!ue operators.
Has $nan!ial ba!king o" the -overnment
eaknesses o" AIC I3,IA
Air India is operating a!ross broad international and domesti! markets
!ompeting with world leading giant airlines as well as lo!al small
operators. .his la!k o" !larity on the strategi! dire!tion largely dilutes its
!apabilities and !on"uses its brand within markets.
Eow pro$tability and utili5ation o" !apa!ity.
-rowing <ompetitor base and entry o" Eow-<ost <arriers FE<<BsG .he
airlineBs high-!ost stru!ture and the !ompulsions o" being a publi! se!tor
unit are the reasons and it had been making a loss and shall !ontinue to
make losses "or some more *uarters.
=pportunities o" AIC I3,IA
India airline industry is growing "aster and will !ontinue to grow as the
-,' in!reases# and the trend is predi!ted to !ontinue on!e the slowdown
re!edes.
orldwide deregulations make the skies more a!!essibleN the route
agreement is easier to be a!hieved.
.he number o" "oreign visitors and investors to India is in!reasing rapidly.
<omplementary industry like tourism will in!rease demand "or airline
servi!e.
.he <ivil Aviation :inistryBs strong regulation and prote!tion provides
opportunities "or !onsolidation and optimi5ation.
<ustomers are getting wealthier# tend to be less pri!e-!ons!ious and
pre"er to !hoose *uality servi!e over !ost.
;est time "or introdu!ing E<<Bs.
.hreats "or AIC I3,IA
Air India "a!es imminent aggressive !ompetition "rom world leading
airlines and pri!e wars triggered by domesti! players.
.he Indian Cailway :inistry has dramati!ally improved speed and servi!es
in their mediumOlong distant routes# attra!ting passengers away "rom air
servi!e# with pri!es almost at par with the low !ost !arriers.
SpiceJet
8pi!e2et is a low-!ost airline based in 3ew ,elhi# India. It began servi!e in :ay
2005. /arlier known as Coyal Airways# it is a rein!arnation o" :odiEu"t. 8pi!e2et
marked its entry in servi!e with Cs. MM "ares "or the $rst MM days. .here were
M000 seats available at this rate. It "ollowed it up with a Cs. MMM promotional
s!heme on sele!t routes. .heir marketing theme is "o@ering low ?everyday spi!y
"ares? and great guest servi!es to pri!e !ons!ious travelers". It was voted as the
best low-!ost airline in 8outh Asia and <entral Asia region by 8kytra( in 2004
8=. Analysis
8.C/3-.H8
A /ntered with C8 MM "ares "or the $rst MM days
A 8trong ba!king by the promoters
A Having more than 05 destinations in India
A -ood presen!e in the market due to its branding and advertising
/AK3/88
A Eow market share due to presen!e o" signi$!ant !ompetition
A 3o international destinations
A ,ependen!y on leased assets
A 8mall load de$!ien!y !ompared with !ompetitors
=''=C.73I.I/8
A -rowing population "or
A ,emographi!s
A -rowin g interest on tourism
A -rowing aviation market
A International tie ups would boost brand image
A .a( holiday on air!ra"t leasingP .he 7nion ;udget -overnment o" India
announ!ed 5year ta( holiday on air!ra"t leasing.
.HC/A.8
A Cising "uel !ost
A 8trong !ompetition
A !hanging government poli!ies
GoAir
-oAir is an Indian low-!ost airline based in :umbai.I0J It !ommen!ed operations
in 3ovember 2005. It is the aviation "oray o" the adia -roup. As o" 2anuary
201+# it is the $"th largest airline in India by market share.I+J It operates
domesti! passenger servi!es to 22 !ities with over 100 daily &ights and
appro(imately 4M5 weekly &ights and we" 26 o!tober 201+ it is going to add
;hubaneswar?s ;i%u 'atnaik International Airport as its 22nd ,estination #-oAir to
start + new &ight servi!es "rom =disha <apital ;hubaneswar two dire!t &ights to
3ew ,elhi#and one ea!h dire!t &ight to :umbai and Kolkata I5J Its hubs are at
<hhatrapati 8hiva%i International Airport# :umbaiI6J and Indira -andhi
International Airport# 3ew ,elhi.
8trength
A 8trong ba!king by the promoters
A 3early 1000 &ights per week
A <overs almost all ma%or !ities
A -ood branding and marketing in India
eakness
A :arket share is very less
A It entered Indian market very late
A 3ot too many destinations !ompared with its !ompetitor
=pportunities
A :ore destinations yet to be !overed
A -lobal operations !an also be a value addition
.hreats
A 'lenty o" new E<<Bs to !ompete with who already have taken the lead
A Cising labour !osts
A Cising "uel !osts
Jet Airways
2et Airways is a ma%or Indian airline based in :umbai. It is the se!ond largest
airline in India# both# in terms o" market share and passengers !arried# a"ter
Indi-o. It operates over 0000 &ights daily to 4+ destinations worldwide. Its main
hub is :umbai# with se!ondary hubs at ,elhi# Kolkata# <hennai# ;engaluru. 2et
Airways is a ma%or Indian airline based in :umbai# :aharashtra. It is India?s
largest airline and the market leader in the domesti! se!tor. It operates over +00
&ights daily to 64 destinations worldwide.
It began international operations to 8ri Eanka in :ar!h 200+. .he !ompany is
listed on the ;ombay 8to!k /(!hange# but 10L o" its sto!k is !ontrolled by
3aresh -oyal Fthrough his ownership o" 2etBs parent !ompany# .ailwindsG.
It started !ommer!ial operations on 5 :ay 1MM0 with a &eet o" "our leased
;oeing 404-000 air!ra"t "rom :alaysia Airlines. In 2anuary 1MM+ a !hange in the
law enabled 2et Airways to apply "or s!heduled airline status# whi!h was granted
on + 2anuary 1MM5. 3aresh -oyal P who already owned 2etair F'rivateG Eimited#
whi!h provided sales and marketing "or "oreign airlines in India P set up 2et
Airways as a "ull-servi!e s!heduled airline to !ompete against state-owned Indian
Airlines.
8=. Analysis o" 2et Airways
8trength o" 2et Airways
1. Has !reated a good image among the Indian &iers
2. .rusted Airline by the <orporates
0. =ne o" the biggest Indian airline !ompanies with over 10#000 employees
+. =perations in over 45 Indian !ities and over +00 daily &ights
5. .op o" the mind brand due to e(!ellent operations and marketing
6. It also has international destinations in nearly 20 !ountries
eakness o" 2et airways
1. <ompetition "rom the E<<s and other !ompetitors means market share
growth is tough
2. 'resen!e o" other airlines on international routes making it di>!ult to
have signi$!ant market share
=pportunities "or 2et Airways
1. 8trongly positioned in the International routes
2. Has presen!e in every segment

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